Immoeast announced yesterday, that company started to sell properties in maturing CEE markets, where the properties appreciated substantially and where no short-term appreciation is expected. Immoeast sold so far 2 properties in the Czech Republic (Prague and regional city Olomouc) and then in Tallin. Due to confidentiality reasons no price has been disclosed, however Immoeast reportedly booked large profits and the exit prices are significantly above the market value determined by external appraisers (DTZ and Colliers). Immoeast plans to further dispose properties worth EUR 1.0bn to 1.5bn.
Our view: We see this step from the side of Immoeast as positive given the low potential of appreciation of these properties in shorter term. Management can use proceeds for its expansion else where, mainly SEE and CIS countries where the upside is higher. Although company booked hefty revaluation gains in the past, these were non-cash profits and converting them into cash is a good signal for investors. The news came out yesterday during trading session, so we believe it is already priced in, however more similar newsflow could be expected.